Cincinnati Insurance Co. Wrongfully Denied Philly Venue’s COVID-19 Loss Claims, Class Action Alleges [UPDATE]

The Cincinnati Insurance Company faces an additional proposed class action out of Illinois that was filed by a Chicago tavern operator who looks to challenge the insurer’s “blanket denial” of business loss claims related to the COVID-19 pandemic.

The plaintiff business says it suffered “catastrophic” losses after being forced to halt ordinary operations due to government shutdown orders in March 2020.

According to the lawsuit, Cincinnati issued a “categorical proclamation” that the plaintiff’s losses were not covered under its property insurance policy, insisting that the presence of the coronavirus that led to the government closure orders does not constitute “direct physical damage” or loss to the property.

The case argues that Cincinnati’s “wholesale, cursory coverage denials” were executed without conducting any meaningful coverage investigations, adding that the refusals contradict “the facts and plain language” of the defendant’s insurance policies.

The Cincinnati Insurance Company has been hit with at least two more proposed class action lawsuits filed by businesses who allege their claims stemming from damage incurred due to the COVID-19 crisis have been wrongfully denied.

One suit alleges Cincinnati Insurance Co., the Cincinnati Casualty Company and the Cincinnati Indemnity Company refused to cover a Pittsburgh dentist’s COVID-19-related damage claim even though the individual’s all-risk commercial policy purported to provide coverage for all non-excluded, lost business income, including that which was lost due to “action by a civil authority.” The lawsuit argues that the plaintiff, whose practice temporarily closed on March 23 in light of state orders and federal guidance, suffered direct physical loss or damage to covered property as a result of business shutdown orders, which barred elective dental procedures through June 1. 

The lawsuit alleges Cincinnati Insurance Co. and its affiliates have similarly refused to, or will refuse to, honor their contractual obligations with other businesses in possession of all-risk policies and who incurred business interruption losses due to the pandemic. 

The other case makes similar allegations, particularly that Cincinnati Insurance Co. wrongfully denied a Mobile, Alabama wedding and banquet venue’s all-risk commercial property insurance claim. Though the venue has reopened under restrictive, state-mandated requirements, the lawsuit alleges the plaintiff has nonetheless suffered a substantial loss in business income, damage supposedly covered under the business’s policy. 

The lawsuits can be found here and here.

A Birmingham, Alabama seafood restaurant is at least the second small business to file a proposed class action against the Cincinnati Insurance Company over its allegedly wrongful denial of damage claims stemming from the COVID-19 crisis.

The James Beard Award finalist says it was forced to suspend business in March 2020 as the result of Birmingham and Jefferson County orders preventing access to and occupancy of the eatery amid the coronavirus pandemic. Though the plaintiff held a general liability policy with the defendant, Cincinnati Insurance Co. neglected to hold up its end of the bargain in that it’s failed to pay claims for covered losses and expenses related to COVID-19-induced business closures, the lawsuit alleges. 

“These losses and expenses are not excluded from coverage under the Policy,” the complaint reads. “And because the Policy is an all-risk policy, and Plaintiff has complied with its contractual obligations, Plaintiff is entitled to payment for these losses and expenses.” 

Despite Alabama reopening portions of the state’s economy as of April 28, restaurants in the state are to remain closed until a later date, the suit says.

The lawsuit can be found here.